I have been wanting to appreciate the quality of FLAC files over mp3 while listening to them on my PC and have been looking into getting a new sound system. My wife surprised me for Christmas and got me a Logitech z-5500, but after doing some research, I am under the impression that this is not a good system for being able to appreciate FLAC (lack of clarity on z5500, made for gaming, etc). Is this true?

If so and if I return the logitech, my budget is between 300-600 dollars and i'm looking for a good recommendation on speakers I can hook up to my PC to listen to FLAC; 2.1 is preferred because the room I have isn't best for surround sound. Anyone have any good recommendations? I'd really appreciate any input here.

The Z-5500 is a phenomenal system for 2.1 playback. In fact, Logitech's current flagship is actually a step *down* from the Z-5500 in my esteem. If your computer has an optical output, disconnect the three surround speakers and use it as a 2.1. If you're running Windows, there's a built-in feature that allows you to adjust the system to your room using a microphone. That's exactly the setup I'm running presently, and it sounds crystalline. You'll never achieve genuine studio monitor + acoustic treatment accuracy that way, but it sounds great just the same.

Also, it's important to stress that a well-encoded, one-pass mp3 will be absolutely indistinguishable from a lossless original to your ears. The price and/or quality of the system on which you're listening doesn't factor in, since it's your ears which are taken into consideration with the perceptual coding rather than the playback system. There are still plenty of good reasons to keep FLACs around, but don't lose sleep worrying about audible playback quality differences.